Australian Lenders are now embracing flexibility for self-employed individuals with less than 1 year of income:

There has recently been a shift within the Australian lending landscape, financial institutions are steering in a new direction of flexibility for self-employed individuals, redefining the traditional norms that required a minimum of 12-24 months of income verification. This marks a significant change from the tough policies that once governed lending to individuals who were self-employed.

Historically, lenders in Australia adhered to strict guidelines requiring self-employed individuals to provide a minimum of 12-24 months’ worth of income verification. This evidence typically included Tax Returns, Financial Statements, Notice of Assessments, and/or Accountant Declarations. The rationale behind this requirement was to ensure a consistent and reliable income stream, demonstrating the financial stability necessary for loan serviceability.

Many recent positive changes with the banks, along with changes in the market, cash rate fluctuations, and evolving lifestyles in Australia, have prompted lenders to reassess their approach to self-employed income verification. The result is a newfound leniency, allowing lenders to consider applicants with minimal income documentation and at times less than one year of trading.

So, what are the implications for self-employed individuals?

This shift holds significant implications for those who have recently embarked on their self-employed journey. Previously faced with the challenge of proving a sustained income history over an extended period, these individuals can now explore lending opportunities with fewer hurdles.

The ability to secure funding for homes, investments, business equipment or property has been made simpler with larger financial institutions coming on board with the change. Lending as simple as providing your 2 most recent Notice of Assessments for a Self-employed individual is just one of the many ways in which the process has been simplified.